Geelong leads regional price boom

Geelong is not so much sleepy hollow as a sleeping giant in the process of awakening with median property values in the city rising 51.2 per cent in the past 12 months.

The rise was reported yesterday in the Real Estate Institute of Victoria June quarter figures. Waterfront properties on Corio Bay have led the rises in Geelong, which coincide with the completion of the Geelong Road upgrade.

The bayside city is leading the regional residential boom, but Bendigo and Ballarat - benefiting from economic investment - are not far behind, recording median increases of 38.6 per cent and 35.7 per cent respectively over the year.

Melbourne's median house price rose 3.5 per cent in the June quarter to $359,000 and over the past year jumped 9.6 per cent.

Melburnians' love affair with the water continues, with Mt Eliza recording the highest median gain during the year - 65.4 per cent. It was followed by neighbouring Frankston with an increase of 36.1 per cent.");document.write("

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Valuer Peter Hay attributed the rises to a scarcity of Mornington Peninsula land and the rediscovery of Mt Eliza.

"Parts of Mt Eliza is Toorak by the bay," he said.

Frankston price rises were concentrated around the bay and a town house on Olivers Hill overlooking the water recently changed hands for $1.95 million, according to Mr Hay.

Toorak's long-term poll position was further consolidated with its $1.6 million median - a rise of nearly $500,000 in the past two years.

South Yarra recorded a fall of 16.9 per cent during a low volume of turnover in the June quarter, but Mr Hay said it was still travelling well and was leading the march for the highest priced land per square metre in Melbourne.

He predicted the Toorak rise would flow over to premier eastern suburbs locations such as Malvern and Hawthorn.

During the past 12 months the market had tended to move towards blue chip product with A-grade homes in premier suburbs continuing to command strong prices.

Inner-city apartments were one sector that fell. The drag down effect of the apartment oversupply in the inner city resulted in them recording a 0.5 per cent fall in value during the June quarter and a yearly rise of 4.7 per cent.

The figures are a compilation of results reported by REIV members and do not include all sales conducted in the quarter.

Back in Geelong, residential values have come off a low base after the property market stagnated following the collapse of the Pyramid building society in 1990. Values began picking up from 1999.

During the June quarter Geelong's median value rose 18.2 per cent with a median price of $260,000 up from $220,000 in March. Mr Hay said the recent redevelopment of Geelong's foreshore and the business district added value.

"Geelong has developed its identity as a city with a country village feel," Mr Hay said.

The injection of $30 million into upgrading the city's waterfront was paying dividends, according to the councillor in charge of economic development, Ed Coppe.

State Government and council investment in the past five years has resulted in about $300 million being spent on the waterfront, including redeveloping Cunningham Pier and the construction of Four Points by Sheraton hotel overlooking Corio Bay, Cr Coppe said.

About a quarter of a further $26 million earmarked for the redevelopment of the city centre had been spent, he said.

Geelong's population has risen about 2.4 per cent annually for the past five years, placing further pressure on house prices.

Interest from Melbourne buyers in Geelong has steadily risen in the past 18 months, with Jens-Gaunt's principal agent Michael Kerr estimating about half its sales are to Melburnians.

People are attracted by the lifestyle, cheaper housing and rental returns of between 5 and 6 per cent, Mr Kerr said.

Regional cities were experiencing an upswing from investment and were now an attractive option for young buyers offering job opportunities with the added incentive of affordable housing when compared with Melbourne prices, according to Mr Hay.